Standard & Poor's has downgraded Fairfax Media Limited’s (ASX:FXJ) long-term outlook to negative from stable and affirmed its 'BB+' ratings.
Responding to the downgrade after the market closed on Friday the media company claims the credit downgrade will have no impact on its existing borrowings or cost of debt.
The ratings agency says its negative outlook reflects significant execution challenges facing Fairfax as it restructures the cost base of its metropolitan newspaper business in the face of accelerating structural revenue declines.
However S&P has endorsed Fairfax’s latest cost reduction initiatives, claiming they are supportive of longer term credit quality.
Fairfax has confirmed it expects to deliver EBITDA of about $500 million in the full 2012 financial year.
In the first half of its 2012 financial year, Fairfax recorded a net profit of $97.6 million.
